What is the 1099 reporting requirement?

A:

Quick Answer

The Internal Revenue Service (IRS) requires businesses and nonprofit organizations to issue 1099 forms to individuals or unincorporated businesses that receive more than $600 for rents and services rendered, as of 2015. Most entities require a completed W-9 form prior to making payment, which ensures that they have the recipient’s contact information.

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Transactions that necessitate a 1099 form include some royalties and broker payments, medical and health care payments, cash spent on fish and other aquatic life, backup withholding required for federal income tax payments, and resale of items totaling more than $5000 that happens outside a retail business, according to the IRS. Other expenditures requiring this form include some crop insurance proceeds and some attorney fees.